House panel considering regulation of shipping fees

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cargo crates container port

THE House Committee on Transportation is hearing arguments from technical experts in preparation for the possible regulation of sea cargo fees amid opposition from the shipping industry.

Under a regulated-fee scenario, “if costs are too high, that’s up to the shipper to decide if it wants to (offer service). The government should establish rates. If they can’t earn money at those rates, they need to exit the market,” committee vice chair Bayani F. Fernando of the 1st district of Marikina City said on Wednesday. “I would move that we the government regulate shipping.”

The committee’s technical experts and resource persons were discussing the cost of shipping goods in the Philippines via boat.

“The charges were regulated previously but due to (a new policy) to promote the shipping industry for modernization, the MARINA (Maritime Industry Authority) deregulated the fixing of the freight rates,” MARINA Deputy Administrator for Operations Nanette Villamor-Dinopol told the committee, led by Bukidnon-3rd district Rep. Manuel F. Zubiri.

The Philippine Interisland Shipping Association said freight costs are affected by many factors, which the government needs to investigate before it pushes to regulate shipping charges.

“When we price freight charges we consider many factors and do not just charge a rate where we are guaranteed a profit,” PISA representative Rexter Tupas said.

“Basically in order for us to determine whether or not it is expensive, if there is still room to bring rates down, we have to look at the components of the rates.”

Ernest Villareal, a representative of the Aboitiz group, which operates a shipping business, said “I don’t think we should go back to the dark ages of regulating rates. Let market forces play the only role they can. Competition is good. If there is going to be any regulation, that regulation should only be in the standard of service.”

The committee will convene its technical experts again to finalize its proposal on the matter.

“I think it would be difficult to regulate because once you regulate the industry, you have to regulate fuel because that’s also part of the cost. When you regulate one, you regulate all,” Mr. Zubiri added. — Charmaine A. Tadalan